Tech View: Nifty50 forms 'Maruabozu' pattern, suggests bulls in complete control
NEW DELHI: After making indecisive ‘Doji’ pattern for two straight sessions, Nifty50 on Thursday formed a pattern similar to a bullish ‘Marubozu’, which in Japanese means, bald head, i.e. the index has large real body but no wicks. This suggests that opening level was the day’s low and at closing, the index was at the session’s high.
The MACD line has clearly breached signal line from below, sending a bullish pattern. The 14-day RSI at 77 has moved further into overbought territory. This is after the index saw a fresh leg of upmove from its five-day EMA at around 8,930 level.
The Nifty50 opened at 9,129.65, which was almost equal to the day’s low of 9,128.55 for the index. The index hit a high of 9,158.45, before settling the day at 9,153.70, up 68.90 points, or 0.76 per cent. Unlike a perfect Marubozu, the index had very small wicks, but it does suggest that bulls were in full control all through the day.
“Rather than expecting any reversal, traders you can probably check the pulse of the market as when the RSI generally reach the overbought zone, I think it is not the overbought zone, which is key over here -- at levels of 70-80 on RSI, the momentum is so high that every time or every passing day stocks can rise almost 4-5 per cent. So you have to look at and try and ride the momentum over here,” said Kunal Bothra, an Independent Market Analyst.
Chandan Taparia, Derivatives & Technical Analyst at Motilal Oswal Securities believes that the index needs to hold 9,119 to extend its up move towards 9,250.
“Overall, the Nifty50 has been making higher top – higher bottom formation and supports are shifting higher from 9,000 to 9,075 on immediate basis. Market trend is intact to positive till it remains above psychological 9,000 zones,” Taparia said.
Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory at Chartviewindia.in, believes that once intraday trading range expands for the Nifty50, the index could register fresh breakout for the index target of 9,350 level.
“Traders should continue to remain on the long side unless some signs of reversal on the short term charts are visible. One must keep stop below 9,075 on a closing basis,” Mohammad said.
The MACD line has clearly breached signal line from below, sending a bullish pattern. The 14-day RSI at 77 has moved further into overbought territory. This is after the index saw a fresh leg of upmove from its five-day EMA at around 8,930 level.
The Nifty50 opened at 9,129.65, which was almost equal to the day’s low of 9,128.55 for the index. The index hit a high of 9,158.45, before settling the day at 9,153.70, up 68.90 points, or 0.76 per cent. Unlike a perfect Marubozu, the index had very small wicks, but it does suggest that bulls were in full control all through the day.
“Rather than expecting any reversal, traders you can probably check the pulse of the market as when the RSI generally reach the overbought zone, I think it is not the overbought zone, which is key over here -- at levels of 70-80 on RSI, the momentum is so high that every time or every passing day stocks can rise almost 4-5 per cent. So you have to look at and try and ride the momentum over here,” said Kunal Bothra, an Independent Market Analyst.
Chandan Taparia, Derivatives & Technical Analyst at Motilal Oswal Securities believes that the index needs to hold 9,119 to extend its up move towards 9,250.
“Overall, the Nifty50 has been making higher top – higher bottom formation and supports are shifting higher from 9,000 to 9,075 on immediate basis. Market trend is intact to positive till it remains above psychological 9,000 zones,” Taparia said.
Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory at Chartviewindia.in, believes that once intraday trading range expands for the Nifty50, the index could register fresh breakout for the index target of 9,350 level.
“Traders should continue to remain on the long side unless some signs of reversal on the short term charts are visible. One must keep stop below 9,075 on a closing basis,” Mohammad said.
